Markets regulator Sebi on Friday barred Rana Sugars Ltd and its six directors from the securities market in a matter related to manipulation in issuance of global depository receipts (GDR) issuance.
Sebi also directed the firm to bring back a sum of USD 2.27 million, which was diverted to Seazun, into the company's bank account in India within a period of three months.
The regulator, after conducting a probe between April 2006 and May 2006, noted that the company had issued 2.45 million GDR worth USD 18 million on May 15, 2006.
It was also observed that the entire 2.45 million GDRs were subscribed by only one entity, Seazun, on obtaining a loan from Banco Efisa S.A.
Besides, the company acted as guarantor and deposited the entire GDR proceeds received from Seazun with Banco Bank as security against the loan that for subscribing to the GDRs issued by the company.
Sebi noted that "the GDR issue would not have been subscribed, if the company had not given such a security against the loan taken by Seazun."
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